Lula for World Bank

The announcement of Robert Zoellick’s departure as World Bank president has triggered another round of debate on the selection of the next head of a major Bretton Woods institution. Demands are growing to break the 65-year old tradition of automatically selecting an American the next head of the World Bank. There are other clear alternatives.

At a time when the advanced economies would prefer to talk about correcting global macroeconomic imbalances of trade and finance, for the South, the imbalances are more basic: including North-South representational imbalances in global institutions.

Brazil is among those urging that proper consideration be given to developing country candidates.

Guido Manteaga, Brazil’s finance minister, said: “There is no reason that the president of the World Bank is a specific nationality. It should just be someone competent and capable.”

He added: “Our goal is that emerging countries have the same chance to compete to lead these multilateral organizations.”

Mantega doesn’t have to look far. How about Lula?

Under the leadership of Luiz Inácio Lula da Silva [president from 2003 to 2010], Brazil went into the global financial crisis strong and well governed and emerged more quickly than most advanced economies. Its banks and multinationals, meanwhile, have continued to ascend up the global ranks.

Lula has been one of the most charismatic leaders from the Global South over the past decade. His profile has been robust at G20 summits, calling out those who mismanaged the world economy, and demanding reforms to correct outdated representational arrangements in the global economic system.

His credentials as a champion of the developing economies are strong. He has travelled the globe, advocating for stronger South-South ties, including with Africa, and within the Brics, and has thrown support behind regional forums for South America. He has demanded a greater voice for developing countries in global decision making and agenda setting.

Lula is respected by opinion shapers in the North. Brazil has made substantial contributions to multilateral institutions, from the UN system, to giving more than China to the International Development Association (IDA), the World Bank’s fund for the poorest countries.

In the policy influence world, both Chatham House in London, and Sciences Po in Paris, awarded Lula with “person of the year” type honours.

The appointment of the former Brazilian president would not by itself solve the legitimacy challenges that the World Bank faces.

Although the credibility problems of the Bank are not as severe as those of the IMF, it should not be forgotten that it was only four years ago that the Bank appointed its first chief economist from the developing world – from China.

The symbolism of appointing Lula would be hard to miss.

For the US, it would break America’s hold on the presidency and could be seen as bringing risk at a time when many around the world are questioning the model of development that the Bank should be promoting. The global financial crisis shook the previous assumptions.

However, with Lula as president, the Bank would be led by someone who has fought courageously for democracy, equality and social justice. There would be agreement, at least at this level, on the good governance model.

For the traditional and has-been-great powers, this upside of Lula should not be underestimated.

If, for health reasons, Lula would prefer not to take up the position – a totally understandable response – the search should then turn to someone with similar, even if not equal, credentials.

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